- 01City Chic expects positive first-half EBIT as reduced discounting lifts margins.
- 02ANZ full-price comparable sales rose 19.6%; group revenue fell 1.7%.
- 03Retailer expects positive cash and no drawn debt at half-year.
City Chic Collective (ASX: CCX) expects to return to positive first-half EBIT after its reduced-discounting strategy lifted gross margins and full-price store sales.
The retailer reported a 19.6% rise in comparable full-price store sales across Australia and New Zealand (ANZ) in the 18 weeks to 1 November 2026.
Group revenue excluding discontinued wholesale operations fell 1.7% from the corresponding period, but trading gross margin dollars increased 2.2% as the business shifted away from promotional sales.
The business attributes its stronger full-price performance to changes in product quality, assortment ,and price points designed to offer value without recurring deep promotions.
Full-Price Stores Improve
Comparable ANZ store sales rose 15.4% across the network, helping total store revenue increase 7.5% despite the retailer operating seven fewer stores than a year earlier.
Store trading gross margin dollars increased 11.5%, while comparable store margin dollars climbed 15.5%, reflecting stronger customer demand and reduced reliance on discounting.
City Chic closed four stores after June and opened a new outlet at Rouse Hill Town Centre in October, while its clearance stores recorded improved profitability.
“Our full-price stores remain the key driver of City Chic’s profitability, with strong comparable sales growth reflecting the positive customer response to improvements in product, quality and value,” chief executive officer Phil Ryan said.
“We enter the important Black Friday and Christmas trading period with a disciplined inventory position and significantly improved underlying economics—there is still important trading ahead, but the start to FY27 gives us confidence in our strategy and our progress towards a sustainably profitable business into the future.”
Online and US Trading Diverge
ANZ online comparable sales declined 7.4% following the planned August reduction in promotional activity, although trading gross margin improved by 200 basis points.
Online trading gross margin dollars in the region fell 4.5%, with the retailer pointing to an improving sales trend as its spring and summer collections gained traction.
In the US, comparable sales decreased 12.0%, but comparable trading gross margin dollars grew 7.1% as lower discounting supported the profitability of that operation.
US online trading gross margin rose by 1,060bps against the corresponding period, with the new winter collection gaining traction despite the lower sales base.
Across the group, comparable sales increased 1.2% and comparable trading gross margin dollars advanced 5.1%, while the overall trading gross margin widened by 240bps.
Cash Position and Holiday Outlook
The retailer expects to finish the first half of FY27 with a positive cash balance and no drawn debt, supported by tight cost and inventory controls.
Its $10 million debt facility remains available until 31 March 2028, with the first required FY27 clean-down completed and the second scheduled for December.
City Chic has maintained operating costs in line with trading activity, seeking to translate its higher-margin sales mix into improved underlying earnings.
The group cautioned that retail conditions remain challenging and the peak seasonal trading period is yet to conclude, leaving the first-half profit outcome dependent on upcoming sales.
Get the wire before the market opens.
The ASX small-cap stories that matter, filed before 9am AEST. Curated by the Small Caps desk.